Tuesday, March 06, 2012

Random House: In Dreams of My Data

It would be hard to imagine that a less equal business relationship
exists than that between publishers
and libraries. Without even the
semblance of discussion, negotiation or consultation Random House did what
HarperCollins did last year and imposed a solution to mitigate a problem
no one can even prove exists. The
problem: That loaning eBooks from a library is so easy that retail sales will
be destroyed. Curiously, Amazon and
Barnes & Noble, both of whom would naturally have a problem with free
books, have always been fairly mute about how libraries retain a competitive
advantage over these retailing behemoths.

Random House’s solution is to triple down on the price of
the book; the logic of the tripling is just as opaque as Harpercollins choosing
26 loans until their books ‘expire’. As a
cop out, Random House suggests that more data is needed and on the delivery of
said data they may adjust their pricing accordingly. Those with rose colored glasses will want to view
that as a possibility that they will bring their pricing downwards; but,
really? The whole notion of use-data is
both a canard and disingenuous. For one,
I’m not aware of any publisher sponsored research or collaboration (with ALA, OCLC, etc.) where
the purpose was to define the library patron and their purchasing
behavior. It’s not like the behavior
hasn’t been there to study for 100 years.
In fact the data is available – certainly not in one database but in
three or four; for example, circulation data from an OPAC, bibliographic
information from OCLC, psychographic information from GfK Group and retail
sales information from BookScam. What’s
missing is the willingness to do the hard work.

Sadly, libraries have very little negotiating leverage or
power. And it’s not like they can go to
their cities or states for more money so that they can buy these more expensive eBooks. What’s the last public sector
anything that had their budget raised 300%?
So, libraries are dependent on public outrage and even there most people
will shrug their shoulders and move along.
Current ALA President Molly Raphael's statement was part cajoling, part
plea – and who can blame her? There
aren’t that many options:

“While I appreciate Random
House’s engagement with libraries and its commitment to perpetual access,”
Raphael said, “I am deeply disappointed in the severe escalation in ebook
pricing reported today. Calling on our history together and our hope to satisfy
mutual goals moving forward, the American Library Association strongly urges
Random House to reconsider its decision. In a time of extreme financial
constraint, a major price increase effectively curtails access for many
libraries, and especially our communities that are hardest hit economically.

“Also, ALA appreciates the
data gaps that exist, and we commit to work quickly and collaboratively to
address this concern. We must have better data to inform decisions that have
such wide and deep implications.

Random House did not jump on the band wagon with the other large trade
houses when they all went over to the agency model but with this unilateral
action they probably have every trade house cheering them on. Random House is unlikely to ‘make it up in
volume’ because most libraries are simply going to buy other publisher’s eBooks
(until they go up as well), and I can say categorically – because I have no
data to back this up – that they won’t see a corresponding increase in retail
sales either.

Any willingness y publishers to really work with public libraries to work out a solution has been spotty at best. The fact that the prime distribution avenue into the public library segment seems to act as much like a bumbling doofus as it does a concerned partner probably serves the publishers perfectly. Fellow traveler Eric Hellman perfectly numbers the real issues associated with eBook distribution into public libraries but resolving these to any degree is probably beyond expectation.

3 comments:

Anonymous
said...

Surely the commodification of ebooks to prices less than that of a candy bar effectively makes libraries redundant? Libraries were conceived to provide access of (the then) expensive books to the public, but in a world where we have devalued the book to pennies, a trip to the library (whether by car or public transport) becomes more expensive in terms of transactional cost than buying an ebook!

Let's not forget the purpose of libraries: to disseminate published works as widely as possible to those who cannot afford the costs of buying them. The digital supply chain currently beats libraries both in terms of dissemination and cost. Ergo, what is the point of libraries? If they must reinvent themselves to remain relevant, then perhaps the should consider breaking with their traditional models of lending?

After all, publishers are being encouraged to break with THEIR traditional models.

But the books in question aren't the price of a candy bar. Libraries probably were never just about 'books' but about gaining access to and acquiring knowledge. To provide access to the means for someone to better themselves, to provide community and support so that they could compete in a world were ordinarily their access to this content and this support system would have been difficult or impossible. The fact that libraries also benefit you and I is a bi-product of what their primary objectives were (are).

I would agree that the sympathy can be over-wrought and hyperbolic and I've often rolled my eyes over some of it (particularly in the UK) but there are many libraries that are helping themselves, becoming more relevant, changing the way they do things, etc. unfortunately even the most innovative libraries don't seem to get too much support from their suppliers.

I honestly believe that the internet reduces the library to an extraneous link in the value chain.

In the day of streaming content directly to customers, holding a copy of each book on hundreds of local silos (called libraries) in order to serve them up to a contrived idea of a 'local' population seems ludicrous.

We may mourn the passing of libraries as a cultural issue and physical place of society, but the fact remains: they are fast becoming irrelevant.

We have been here before: bricks 'n' mortar bookshops and indie booksellers. Yes, it's a shame to see so many go. But we've had to put up with the following exhortations:

Many cottage industries were rendered redundant during the industrial revolution. Just as so many points in the value chain are being made redundant by the digital revolution. At some point we have to accept the disappearance of old models and old institutions and make way for the new. We are in just such a transition now.

RH charging a triple multiple for books is neither here nor there, given where we're all headed. Because ebook lending will simply move the conversation far beyond that state of affairs within 3-5 years.

It's happened to Booksellers, it is happening to Publishers, and it is certainly happening to libraries too. What's important and relevant is what will take their places. (And I hope to god it's not Amazon as the de facto global library system!)

Michael Cairns

I enjoy discussing the publishing industry and in particular the changes that impact the business. On PND, I don't write about everything, just the things that interest me.

My career spans a wide range of publishing and information products, services and B2B categories and my operating and consulting experience has largely been with brand-name companies such as PriceWaterhouseCoopers, Macmillan, Inc., Berlitz International, AARP, R.R. Bowker and Wolters Kluwer.

I have served as a board member of the Association of American Publishers (AAP), the Book Industry Study Group (BISG) and in addition to my responsibilities at R.R. Bowker, l also served as Chairman of the International ISBN Executive Committee.